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June 16, 2007

Lyndon LaRouche will comment in depth on the significance and coming impact of this world-changing scandal, in a webcast address from Washington, D.C. on Thursday, June 21 at 1:00 EDT. (Read release by Lyndon LaRouche Political Action Committee).

On June 6, the British Broadcasting Corporation aired a sensational story, revealing that the British arms manufacturer BAE Systems, had paid more than $2 billion in bribes to Saudi Arabia's national security chief and longtime Ambassador in Washington, Prince Bandar bin-Sultan, over a 22 year period. The BBC revelations were further detailed on June 11, in a one-hour Panorama TV documentary, provocatively titled "Princes, Planes and Pay-offs," which detailed a more than decade-long probe by the Guardian, BBC, and the British Serious Fraud Office (SFO), into the al-Yamamah arms contract, a nearly $80 billion, 22-year long deal between BAE Systems and the Saudi government, in which British-made fighter jets and support services were provided to the Saudi Kingdom, beginning in 1985.

Every British government, from Margaret Thatcher, through John Major, to Tony Blair, has been thoroughly implicated in the BAE-Saudi scandal. In December 2006, Britain's Attorney General, Lord Goldsmith, ordered the SFO probe shut down, declaring that any further investigation would gravely jeopardize British national security. Prime Minister Blair fully backed his Attorney General, and is now scrambling to complete the fourth phase of the al-Yamamah deal before he leaves office next month.

The furor that followed the Goldsmith announcement triggered a number of international investigations into the BAE Systems scandal, including by the Swiss government and the OECD (Organization of Economic Cooperation and Development, the so-called "rich nations" club). More recently, the U.S. Department of Justice has reportedly opened a probe into money laundering and possible violations of the Foreign Corrupt Practices Act, on the part of the British and the Saudis. The estimated $2 billion in cumulative payoffs to Prince Bandar, for his role in brokering the al-Yamamah deal, went through the Saudi government accounts at Riggs Bank in Washington, D.C., thus opening the U.S. jurisdiction.

While the various British investigations into the al-Yamamah (Arabic for "the dove") arms deal did unearth a vast network of front companies, offshore shells, and corrupt politicians, who benefitted richly from the deal, EIR's own preliminary investigation into the scandal has uncovered a far more significant story, one that will send shock waves through the City of London financial circles, as well as top figures within the British monarchy, who are all implicated in a far bigger scheme that goes to the very heart of the Venetian-modeled Anglo-Dutch Liberal system of global finance, which is now on its last legs.Al-Yamamah

In 1985, the Kingdom of Saudi Arabia, in part frightened by the ongoing war between its neighbors Iran and Iraq, which had reached a highly destructive phase known as the "war of the cities," sought to purchase large numbers of advanced fighter jets to build up their Royal Air Force. Initially, the Saudis sought approval from the Reagan Administration to purchase American-made F-15 fighters. The Saudi F-15 deal required Congressional approval, and the America Israel Public Affairs Committee (AIPAC) waged a massive effort to kill the sale. According to several well-informed Washington sources, Howard Teicher, a senior official on the Reagan National Security Council (director of Near East and South Asia, 1982-1985; senior director, Politico-Military Affairs, 1986-1987), also played a pivotal role in the AIPAC effort, which ultimately succeeded in killing the deal. Teicher, according to the sources, withheld information from Reagan, stalling a Congressional vote until AIPAC had fully mobilized, and then convinced the President to withdraw the request, rather than face an embarrassing defeat in the Congress.

Other sources have offered a slightly different version of the failure of the F-15 deal, claiming that intelligence community estimates, since the mid-1970s, had warned of instability in the Persian Gulf, and that there were, therefore, other reasons to question the advisability of the sales of advanced U.S. military technology to Saudi Arabia, particularly after the Khomeini Revolution in Iran.

Whatever the reason, the F-15 deal failed. The very next day, after the Reagan Administration threw in the towel, Prince Bandar, the Kingdom's de facto chief diplomat to Britain, the Soviet Union, and China, as well as the U.S.A., flew to London to meet with Prime Minister Margaret Thatcher. British arms sales did not require parliamentary approval, and the British government, in 1966, had created an agency, the Defence Export Services Organization (DESO), to hawk British arms around the globe. BAE Systems had been created in 1981, when Thatcher privatized the British arms manufacturing industry, which had, only four years earlier, been nationalized under the Labour government. And BAE Systems, the largest arms manufacturer in Europe, dominates the British defense sector.

The Bandar trip to London to confer with Thatcher had been in the works for months. A Ministry of Defence briefing paper, prepared for the Thatcher-Bandar sessions, stated, "Since early 1984, intensive efforts have been made to sell Tornado and Hawk to the Saudis. When, in the Autumn of 1984, they seemed to be leaning towards French Mirage fighters, Mr. Heseltine paid an urgent visit to Saudi Arabia, carrying a letter from the Prime Minister to King Fahd. In December 1984, the Prime Minister started a series of important negotiations by meeting Prince Bandar, the son of Prince Sultan.... The Prime Minister met the King in Riyadh in April this year and in August the King wrote to her stating his decision to buy 48 Tornado IDS and 30 Hawk."

Thatcher also had every reason to feel confident that Bandar would be the perfect interlocutor between Saudi Arabia and Great Britain in the deal of the century. At age 16, several years after his father, Prince Sultan, had been named Minister of Defense of the Kingdom, the Prince was sent to England to study at the Royal Air Force College Cranwell, the elite officer's training school for future RAF pilots. At least one senior American intelligence official has reported widespread rumors that Bandar was recruited by MI6, the British Secret Intelligence Service, before he finished his RAF training. Other sources, intimately familiar with the goings-on at BAE Systems, report that the "private" aerospace giant has a sales force made up almost exclusively of "lads" recruited to MI6 before their hires.

Whether or not these reports are accurate, Bandar certainly is a serious Anglophile. The best accounts of his adventures in England appear in the 2006 book, The Prince—The Secret Story of the World's Most Intriguing Royal (HarperCollins, New York), by William Simpson, a Cranwell classmate, and still-intimate pal of the Prince. Simpson, who wrote the book with the full cooperation of Bandar, recounted his friend's intimate ties with every occupant of 10 Downing Street.

"In London," Simpson reported, "Bandar would breeze into Number Ten with uninhibited panache. From Margaret Thatcher to John Major to Tony Blair, Bandar's access was extraordinary." By Prince Bandar's own account to Simpson about al-Yamamah, "When we first made the agreement, we had no contract. It was a handshake between me and Mrs. Thatcher in Ten Downing Street." It was months before the final details of the al-Yamamah deal were finalized, and the contracts signed. But even before the ink had dried, Britain had provided the initial delivery of Tornado jets—from the inventory of the RAF.

By the time the formal Memorandum of Understanding was signed between the British and Saudi defense ministers on Sept. 25, 1985, the original order had been expanded to 72 Tornado fighter jets and 30 Hawk training aircraft, along with other equipment and services. There have been two subsequent deals, al-Yamamah II and III, and al-Yamamah IV, worth as much as $40 billion in additional arms deliveries, is in the final stages.Oil-For-Aircraft

The al-Yamamah deal was structured as a barter arrangement. While the Saudis did agree to pay cash for certain services and infrastructure construction under separate sub-contracts—and those cash payments went, in part, to "consulting fees" or bribes, including the $2 billion to Prince Bandar's accounts at Riggs Bank, and similar reported payments to the Chilean dictator Gen. Augusto Pinochet and the Dutch Royal Consort, Prince Bernhard—the essential contract involved the Saudi delivery of oil to Britain, in return for the fighter jets.

And here is where the story gets really interesting.

Saudi Arabia agreed to provide Britain with one tanker of oil per day, for the entire life of the al-Yamamah contracts. An oil tanker holds approximately 600,000 barrels of oil. BAE Systems began "official" delivery of the Tornado and Hawk planes to Saudi Arabia in 1989. BAE Systems now has approximately 5,000 employees inside Saudi Arabia, servicing the contract.

Is it possible to place a cash value on the oil deliveries to BAE Systems? According to sources familiar with the inner workings of al-Yamamah, much of the Saudi oil was sold on the international spot market at market value, through British Petroleum and Royal Dutch Shell.

EIR economist John Hoefle has done an in-depth charting of the financial features of the oil transactions, based on BP's own daily tracking of world oil prices on the open market. Using BP's average annual cost of a barrel of Saudi crude oil, Hoefle concluded that the total value of the oil sales, based on the value of the dollar at the time of delivery, was $125 billion. In current U.S. dollar terms, that total soars to $160 billion (see accompanying charts).

Based on the best available public records, the total sticker price on the military equipment and services provided by BAE Systems to Saudi Arabia, over the 22-year period to date, was approximately $80 billion. And those figures are inflated by billions of dollars in slush fund payouts. Indeed, the latest limited-damage scandal around al-Yamamah erupted in November 2006, when a Ministry of Defence document leaked out, providing the actual sticker price on the fighter jets. The figure confirmed the long-held suspicion that the prices of the jets had been jacked up by at least 40%.

BAE Systems, a crown jewel in the City of London financial/industrial structure, secured somewhere in the range of $80 billion in net profit from the arrangement—in league with BP and Royal Dutch Shell! Where did that money go, and what kinds of activities were financed with it? The answer to those questions, sources emphasize, holds the key to the power of Anglo-Dutch finance in the world today.

Prince Bandar's biographer and friend William Simpson certainly provided an insight into the inner workings of the al-Yamamah project: "Although al-Yamamah constitutes a highly unconventional way of doing business, its lucrative spin-offs are the by-product of a wholly political objective: a Saudi political objective and a British political objective. Al-Yamamah is, first and foremost, a political contract. Negotiated at the height of the Cold War, its unique structure has enabled the Saudis to purchase weapons from around the globe to fund the fight against Communism. Al-Yamamah money can be found in the clandestine purchase of Russian ordnance used in the expulsion of Qaddafi's troops from Chad. It can also be traced to arms bought from Egypt and other countries, and sent to the Mujahideen in Afghanistan fighting the Soviet occupying forces."

In effect, Prince Bandar's biographer confirms that al-Yamamah is the biggest pool of clandestine cash in history—protected by Her Majesty's Official Secrets Act and the even more impenetrable finances of the City of London and the offshore, unregulated financial havens under British dominion.The Saudi Side of the Street

For its part, the Saudi Royal Family did not exactly get ripped off in the al-Yamamah deal. When the contract was signed in 1985, according to sources familiar with the arrangement, Saudi Arabia got an exemption from the Organization of Petroleum Exporting Countries (OPEC). The barter deal with BAE Systems did not come under their OPEC production quota. In other words, Saudi Arabia got OPEC approval to produce 600,000 barrels a day, above the OPEC ceiling, to make the arms purchases.

According to the Energy Information Administration, a branch of the U.S. Department of Energy, over the life of the al-Yamamah program, the average cost of a Saudi barrel of crude oil, delivered to tankers, was under $5 a barrel. At that price, the annual cost to the Saudis for the 600,000 barrels per day was $1.1 billion. Over the duration of the contract to date, the cost to the Saudis of the daily oil shipments was approximately $24.6 billion. The commercial value, in current dollars, as noted above, was $160 billion.

The Saudis have forged a crucial partnership with the Anglo-Dutch financial oligarchy, headquartered in the City of London, and protected by the British Crown. They have, in league with BAE Systems, Royal Dutch Shell, British Petroleum, and other City giants, established a private, offshore, hidden financial concentration that would have made the British East India Company managers of an earlier heyday of the British Empire, drool with envy.

At this moment, there is no way of calculating how much of that slush fund has been devoted to the clandestine wars and Anglo-American covert operations of the past two decades. Nor is it possible to estimate the multiplier effect of portions of those undisclosed, and unregulated funds having passed through the hedge funds of the Cayman Island, the Isle of Man, Gibraltar, Panama, and Switzerland.

What is clear, is that the BAE Systems scandal goes far beyond the $2 billion that allegedly found its way into the pockets of Prince Bandar. It is a scandal that goes to the heart of the power of Anglo-Dutch finance.

There is much, much more to unearth, now that the door has been slightly opened into what already appears to be the swindle of the century.

The skew in the global financial system -- commonly called 'global imbalance' -- seems to be fast spiralling out of control.

For some time now economists have been engaged in the mother of all debates: whether the US dollar would collapse by as much as 40% when compared to other currencies (some are even betting on the US dollar going belly-up) or whether there would be an orderly devaluation -- that is, a gradual revaluation of other currencies vis-�-vis the US dollar.

In effect, the question that is confronting us is not 'whether' but 'when' and by 'how much.'

This global imbalance can be understood in economic terms by simply examining the massive size of America's twin deficits -- trade and budgetary. Put modestly, Americans have been living way beyond their means, consuming much more than what they could possibly afford and, in the process, borrowing far beyond their capacity for too long.

This was facilitated by a policy of maintaining weak currencies across the world, notably in Asia. This policy of maintaining a competitive exchange rate for their currency to boost exports has resulted in a race to the bottom amongst various countries.

While the going was good, everyone profited and expected the arrangement to continue indefinitely. Unfortunately, linearity as a concept has limited appeal in real life, much less is global macroeconomics.

No wonder, of late, countries are discovering that this arrangement has its limitations. The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus.

In substance, countries are producing their goods, exporting it mostly to the US, and parking the resulting export surpluses with the US to facilitate US to finance its imports!

Clearly, the global imbalance is a by-product of this mindless competition by various countries to devalue their own currencies and the reckless consumption in US. Naturally, it is indeed tempting to blame US consumption for this crisis. However, one must hasten to add that the emerging economies -- notably Asian countries, especially after the1998 currency crisis -- with their fixation for weak currencies, are equally to be blamed.

The net result? Well, consider these facts:

By mid-May 2007, the US National Debt stood at approximately at mind-boggling $8.85 trillion -- i.e. approximately $28,000 for every American.

The basic structure of the American economy is that the deficit of the US government is 4% of the GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of 7% to be covered by the capital flows from the rest of the world.

The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates to 7% of its GDP. Surely, even for the US, this is unsustainable.

In order to ensure that this money is routed into America and to sustain its gargantuan borrowing programme, the US has repeatedly raised its interest rate to its current levels of 5.5%. While the very size of the US debt makes any further increase in interest rates virtually impossible (as it would make borrowings uneconomical), any cut in interest rates to stimulate its economy and make it competitive would mean that the US may not get the money it requires to sustain itself.

On March 28, 2006, the Asian Development Bank [Get Quote] is reported to have issued a memo, advising members to be ready for a collapse of the US dollar.

Since end March 2006, the US Federal Reserve has stopped publishing the quantum of broad money (that is the aggregate of US dollars circulating in the entire world -- technically called 'M3') in the US economy. This is the worst possible signal that the US Federal Reserve could have sent to the world.

Suspended sense of disbelief

Obviously, what aids and sustains the US dollar is a 'suspended sense of disbelief' amongst countries about the value of US dollar. Yet, common sense tells us that the excess supply will obviously result in a fall in the value of any product. The US dollar is no exception.

Late Iraqi leader Saddam Hussein was fully aware of this paradigm. Seeking to exploit the inherent weakness of the US dollar, Saddam wanted to trade his crude in Euros, which would have lead to a lower demand for the US Dollar and thereby triggered a dollar collapse. And those were his 'weapons of mass destruction -- WMD.'

And if some analysts are to be believed, Venezuela and Iran too possess the very same WMD. Naturally, it requires some specious arguments and military intervention to protect the US dollar. Never in the history of mankind has a national army protected the national currency so vigorously as the US Army has done is the past decade or so.

What is bizarre to note here is that despite the fact that crude is produced mainly in the Middle East; officially it can be purchased in dollar terms from one of the two oil exchanges situated in New York and London. Obviously, should Iran carry out the threat to commence oil trade in Euros or better still an oil exchange, the US dollar would come under tremendous pressure.

The US dollar is akin to the promissory note of a defunct finance company. It is common knowledge that a currency, when not backed by anything precious is just a piece of paper. When US abandoned the Gold Standard in early 70s, countries habituated by then to the US dollar under the Bretton Woods arrangement continued to accept the US dollar as an international currency without demur as the world was not prepared for any other alternative. Else, the global economy would have collapsed by 1971.

But the diplomatic silence did not solve the problem. It merely postponed it and it has come back to haunt us.

Post gold standard, by a tacit approval of the Organisation of Petroleum Exporting Countries (OPEC) and strategic manoeuvring, the US had ensured that its currency is implicitly backed by crude, instead of gold. This explains the American 'geo-political and strategic interests' in the Middle East.

But over time even this was found to be insufficient and consequently the oil standard of the 70s gave way to an implicit multiple commodity standard of today. Naturally, commodity prices -- including crude prices -- have soared in the past few years. Unfortunately, this arrangement too is failing the US. No wonder, the US dollar increasingly resembles a promisory note of a defunct finance company.

It is no coincidence that global trade in most commodities, including oil, is denominated in US dollars as the respective international exchanges are located in the US. To what extent are the prices of these commodities manipulated to protect the US dollar is anybody's guess.

However, it may not be out of place to mention that a barrel of oil which cost less than $10 to produce is sold approximately at $70 in the international market.

But as commodity prices go up it has lead to inflation across the globe. No wonder, countries are forced to increase their interest rates to fight inflation.

This has triggered an interest rate hike across continents and the US is finding it extremely difficult to sustain its current borrowing programme: it hardly has any elbow room to manoeuvre.

Doomed if it does, damned if it doesn't

Meanwhile, countries are increasingly realizing that the value of the US dollar that they are holding is fast eroding, whatever be the 'officially managed exchange rate.' And if fewer people want the US dollar -- as for instance when oil is traded in Euro the demand for the US dollar will fall -- it would trigger an avalanche.

No wonder, the US Fed is unwilling to make public the M3 figures, as it does not want the holding position of the US dollar to be publicised.

Interestingly, in such a doomsday scenario, some economists are still betting on central banks of other countries to defend the US dollar. It would seem that the US has 'outsourced' even this sovereign function to the central banks of other countries. After all, should the US dollar collapse, the biggest losers will not be the US but those who have US dollar-denominated forex reserves.

Naturally, countries holding US dollar reserves are caught on the horns of a serious dilemma -- should they seek to correct the global imbalance, it could result in the imminent collapse of the US dollar, and should they continue to defend the US dollar, they would be a long-term loser as the current arrangement has seeds of self-destruction.

While every central banker is conscious of this fact and thereby seeks to postpone the inevitable while nervously looking for his counterpart in any other country to break ranks and thereby trigger the collapse.

Surely, the emperor is without any clothes. There are only two possibilities from here on: Either we are witness a global meltdown of the US dollar, or allow controlled US dollar devaluation (read, revaluation of other currencies). If it is a global meltdown the global economy is doomed, if is an orderly devaluation, it is damned.

The author is a Chennai-based Chartered Accountant. He can be contacted at mrv1000@rediffmail.com.

World Affairs Council of Northern California San Francisco, CAApr 3rd, 2007

The Future of U.S. Energy: The Oil Dependence Dilemma with Amory Lovins speaking at the World Affairs Council of Northern California.

Is it possible for American industry to adapt to new oil-free technologies to boost profits and competitiveness? In his book, Winning the Oil Endgame, co-author Amory Lovins has outlined a strategy for American business and military leaders to shift the United States functionally and profitably away from oil by 2050. Lovins argues that by 2015, the United States can save more oil than it receives from the Persian Gulf; by 2025, use less oil than in the 1970's, by 2040, import no oil; and by 2050, use no oil at all. He believes American business can lead the nation and the world into the post-petroleum-era, a vibrant economy and lasting security.

http://www.domain-b.com/ Mumbai: Dr Reddy's Laboratories Ltd has expanded its presence in Africa with the opening of its 40th overseas office in Lagos , Nigeria in partnership with Phillips Pharmaceuticals.

This distributor-based model will serve the $280 million Nigerian pharmaceutical market, DRL said in filing with the Bombay Stock Exchange (BSE).

The company is initially targeting therapeutic areas tike gastroenterology, diabetes and cancer. The first phase of launch will see major brands like Omez, Reclide, Diavista, Osetron and Docetere 20mg (from amongst the range of oncology drugs) being introduced in the Nigerian market.

"We are committed to bringing quality and affordable medicine to people across the world and the initiation of our Nigerian operations is one more step in that direction. With the introduction of our leading brands, we are extremely confident of making our presence felt among the Nigerian medical community," Rajesh Kumar, head-AMEEERA region of DRL, said.

DRL manufactures and markets API (bulk actives), finished dosages and biologics in over 100 countries worldwide, in addition to having a very promising drug discovery pipeline. The drug maker currently operates across the US, the UK, Russia , China, Sri Lanka , Kazakhstan, Kazakhstan among others.

The company registered a net profit of $ 1,510 million in FY'07, of which international revenue accounted for 86 per cent or $1,297 million.

Meskhetian Turks, also called as Meskheti, lived in the historical region of Meskhetia in southwestern Georgia until 1944. They are the former Muslim inhabitants of Meskheti, which is located along the Turkish boarder. Their language belongs to the Turkic group, the east-Anatolian dialect. Meskhetian Turks are the consequence of the movement of Turkish settlers into the region during the Ottoman Empire. They are influenced by Georgian culture. Their origins have been debated for such a long time, some saying they are Turkified Georgians, some advocating that they are Georgified Turks, and some saying the truth lies somewhere in between. Deported to Central Asia in 1944 by Joseph Stalin, they settled in Kazakhstan, Kyrgyzstan, and Uzbekistan. Today the estimated population of Meskhetian Turks is around 300,000. Although their Turkic culture allows easy integration in Azeri society, their ultimate desire is to be repatriated to Georgia. It wasn't easy for them to have a peaceful life even after World War II. Some of them returned with a 1996 Georgian presidential decree allowing their resettlement with government support.

ANKARA – Turkish Daily News

A bill allowing tens of thousands of Meskhetian (Ahıska in Turkish) Turks to return to their homeland almost half a century after being exiled by Joseph Stalin has sparked debate among rival political parties in Georgia, BBC World reported on its Web site yesterday.

Meskhetian Turks are the former Muslim inhabitants of Georgia, along the border with Turkey. They were deported to Central Asia in 1944 by Soviet leader Joseph Stalin and settled in Kazakhstan, Kyrgyztan and Uzbekistan. A majority of Meskhetian Turks are ethnic Turks and speak Turkish. The estimated population of Meskhetian Turks is around 300,000 of which only 25,000 live in Turkey.

The Georgian government recently introduced a bill to parliament to allow Meskhetian Turks to return. However, opposition parties are against the bill saying that they are not powerful enough to handle a new ethnic minority. These parties also argued that the stability in the country will be harmed if Meskhetian Turks return. Despite the opposition, the Georgian government will be able to pass the bill in the parliament.

Opposition: Let's implement quotas

Georgia's move will also please the Council of Europe who were pressing the Tbilisi government to accept those who want to return to their country. Georgia's President Mikhail Saakashvili will be able to demonstrate his respect for human rights with this law but he doesn't offer any financial support to those who want to return.

A poll in Georgia showed that the majority of Georgian people are against the idea of their return. Kahka Kukava, an official from the opposition Conservative Party proposed to implement quotas for Meskhetian Turks.

If the bill passes in the parliament, Meskhetian Turks will be able to return to Georgia by next year.

Turkey expresses satisfaction

Meanwhile Turkish officials, monitoring the matter closely for years, expressed their satisfaction with the decision taken by the Georgian government. The situation of the Meskhetian Turks is very poor in the countries they were forced to live. We hope this recent move of Georgia will allow them to re-settle in their homeland and forget all the pains they suffered, an official told the Turkish Daily News yesterday

Saturday 16th of June 2007 Admitting to 'problems' in the acquisition of Russian-built aircraft carrier Admiral Gorshkov for the Indian Navy, Defence Minister A.K. Antony said Saturday that efforts were being made to sort them out.

'There are problems. We are trying to sort them out,' Antony cryptically told reporters on the sidelines of a function in this suburban town where he inaugurated a defence research laboratory set up by Bharat Electronics.

He was responding to queries on the delay in inducting the aircraft carrier, renamed INS Vikramaditya, caused by Russia's reported insistence on raising the $1.5 billion price tag for the vessel, and also that the money be paid in euros and not dollars as had previously been agreed to.

Indian Navy chief Admiral Sureesh Mehta has repeatedly been stating that the vessel would be inducted by the end of this year or early next year as had originally been planned. However, Antony's statement Saturday makes it clear that the deadline would not be met.

The defence minister refused to specify what the 'problems' were and when the issue would be resolved.

Defence Secretary Shekhar Dutt had made a hurried visit to Russia last month to discuss the issue but no common ground could be found either on the Gorshkov deal or on that for the purchase of additional Sukhoi SU-30MKI combat jets for the Indian Air Force (IAF), the price of which the Russians have also hiked.

A high-level Russian delegation is expected here later this month for discussing the price issue but defence analysts pointed out that given the firm stance of both sides, a way out could perhaps be found only when Antony makes a planned visit to Russia in October.

The Gorshkov, in fact, has been mired in controversy almost from the time she was commissioned into the then Soviet Navy in 1987.

Gorshkov is one of four carriers the Soviet Union built at the height of the Cold War. The first three, the Kiev, Minsk and Novorossyisk saw operational service in the Soviet Navy during the late 1970s and the 1980s. With the end of the Cold War, the Russians could no longer sustain a fleet with so many carriers and all three were sold for scrap in the early 1990s.

Gorshkov, earlier called the Baku, was the last to he completed and did not become operational until 1986. However, her operational career was cut short when a devastating fire crippled the vessel in 1994. Although repaired, Gorshkov never saw operational service in the Russian Navy and was finally mothballed in 1996.

By that time, the Indian Navy had been reduced to just one carrier, with INS Vikrant having been retired and INS Viraat undergoing repeated refits to enhance her operational life.

After protracted negotiations, India and Russia on Jan 20, 2004, signed a deal to buy the Gorshkov, along with 12 single-seat MiG-29 fighters and four twin-seat MiG-29 trainers for $1.5 billion.

Of this, approximately $800 was to be spent on upgrading and refitting the ship and $700 million on the 16 MiG-29 jets and six Kamov Ka-31 attack and reconnaissance anti-submarine helicopters.

The upgrade plans involve stripping the ship's foredeck of all its weaponry to make way for short take-off and assisted recovery configuration with a 14.3 degree ski-jump on the bow and three arrestor wires on the angled deck.

The Indian Air Force (IAF) will 'very soon' float a long-delayed global tender for 126 multi-role combat jets in a deal estimated to be valued at around $9 billion (Rs.370 billion).

Ghaziabad, India, 2007-06-16 18:45:02

The Indian Air Force (IAF) will 'very soon' float a long-delayed global tender for 126 multi-role combat jets in a deal estimated to be valued at around $9 billion (Rs.370 billion).

'It will go out very soon. The outer limit is two to three months,' Defence Minister A.K. Antony told reporters on the sidelines of a function in this suburban town where he opened a new research laboratory established by state-owned Bharat Electronics.

While Antony did not specify the reasons for the delay, an official said 'certain procedural issues' needed to be resolved before a request for proposal (RFP) is issued for the aircraft.

The 'issues' relate to areas like calculating life-cycle costs, the manner in which the offsets policy governing defence purchases will be implemented, and transfer of technology (TOT).

Under the offsets policy laid down in the Defence Procurement Procedure-2006 (DPP-2006), 30 percent of all military deals worth more than Rs.3 billion has to be reinvested in India.

Calculating life-cycle costs is another challenge for India's defence planners since this aspect had never been factored in while concluding military hardware deals in the past. Seventy percent of the equipment in the armed forces' inventory is of Soviet or Russian origin.

As for TOT, India has not insisted on technology transfers in the past but this has now been made mandatory.

The IAF desperately needs new aircraft to ramp up its depleting fleet of Soviet-era MiG-21, MiG-23 and MiG-27 aircraft. The MiG-21 has undergone a mid-life upgrade to increase its service life. The MiG-23 has already been retired, while the MiG-27 is being gradually phased out.

This apart, the indigenously developed Tejas light combat aircraft (LCA) that was to replace these jets has suffered huge cost and time overruns and is now unlikely to be inducted before 2012.

Thus, there are also indications that the defence ministry could fast track the process by issuing a RFQ (request for quotation) instead of a RFP.

'This will enable us quicken the process but a view on this is yet to be taken,' the official stated.

However, regardless of whether a RFP or a RFQ is floated, it could be at least five years before price negotiations with the selected manufacturer or manufacturers is concluded and another five years before the first of the new aircraft start arriving, the official added.

By that time, the IAF force levels would have further plummeted from their current all-time low of 30 squadrons and thus, the actual requirement could be for some 200 aircraft, a defence analyst pointed out.

The IAF was operating 39 1/2 squadrons against a sanctioned strength of 45 when a request for information (RFI) was sent out in 2001.

The race for the IAF order is believed to have narrowed down to five aircraft: the US F-16 and F/A-18 Super Hornet, the Swedish JAS-39 Grippen, the French Rafale, and the Russian Mig-29OVT.

The RFI had been sent out to the manufacturers of the F-16, the Gripen, the MiG-29, and the French Mirage-2000-5. In addition, the manufacturers of the F/A-18, the Rafale, and the four-nation European Typhoon also sent in their offers.

Russian President Vladimir Putin, during his visit here in January, had plugged for the MiG-35, essentially a re-engineered version of the MiG-29.

Officials are tight-lipped about the selection process beyond saying the race seems to have narrowed down to five aircraft.

WASHINGTON -- A day after a top US official accused Iran of arming the Taliban in Afghanistan, US Treasury Secretary Henry Paulson asked the financial world to freeze the assets of an Iranian bank.

Paulson added his voice Thursday to a growing chorus of Bush administration officials condemning Iran for its alleged involvement with terrorism and called on allies to tighten the noose around the country the way that they have done with North Korea.

The United States unilaterally designated Bank Sepah as a facilitator of Iranian proliferation in January. It has convinced the United Nations to blacklist it as well.

"Now the entire world must freeze Bank Sepah's assets, and isolate it from the global financial system," Paulson said in a speech to the Council on Foreign Relations in New York.

He said that the state-owned bank is "providing financial services to Iranian missile firms and trying to disguise its activities."

"It was our hope that another nation would take the lead in pursuing an action against Bank Sepah, especially when we learned that one of our allies had independently corroborated the information we shared. Due to a lack of legal authorities and political will, that did not happen," Paulson said. "Other nations often seem to lack the political will to take unilateral actions, and our goal has always been multilateral action.

"It is well known that Iran is pursuing nuclear weapons in violation of international agreements and channeling hundreds of millions of dollars to terrorist groups. Still, when I was first briefed on the details, I was surprised to learn the extent to which Iran was exploiting global financial ties to pursue and finance its dangerous behavior, and the extent to which reputable financial institutions were being drawn into these schemes."

Paulson said that the strategy to rein in Iran combines the use of "intelligence-based targeted financial measures" with an effort to inform financial leaders in government and the private sector how Iran is using the financial system to underwrite its activities.

"We explained how Iran uses front companies and other mechanisms that make it difficult, if not impossible, for businesses dealing with Iran to know their customer or counterparty," he said.

"Repeatedly, state-owned Iranian banks, including the Central Bank of Iran, ask other financial institutions to remove their names from global transactions. This practice aims to evade risk-management controls and threatens to involve responsible financial institutions in transactions they would never knowingly handle," he said.

A similar effort to cut off another Iranian bank last fall was more successful, Paulson said.

In September 2006, the US Treasury Department prohibited Iran's state-owned Bank Saderat from accessing the US financial system. It also publicly disclosed that the Central Bank of Iran was sending money through Bank Saderat to the terrorist group Hezbollah. Treasury also asserted that Bank Saderat had ties to other terrorist groups such as the Palestinian Islamic Jihad and Hamas.

"Almost immediately, financial institutions around the world began to adjust their business with all Iranian state-owned banks and with Bank Saderat. The private sector, when presented with our solid evidence, is able to act much more quickly than governments, who often lack the necessary authority or the political will to take action on their own," he said.

On Wednesday, Undersecretary of State Nicholas Burns told CNN that Iran is shipping weapons to the Taliban and its supporters in Afghanistan.

"There's irrefutable evidence the Iranians are now doing this," Burns said. "It's certainly coming from the government of Iran. It's coming from the Iranian Revolutionary Guard corps command, which is a basic unit of the Iranian government."

Defense Secretary Robert Gates pedaled the information more softly Thursday.

"I have seen analysis suggesting a considerable flow of weapons and support from Iran. And I have not seen information that would directly tie it to approval by the government of Iran," Gates said. "That said ... the quantity that we're seeing makes it difficult to believe that the Iranian government doesn't have some indication or some knowledge of it.

WASHINGTON, June 15 — A year after President Bush and Secretary of State Condoleezza Rice announced a new strategy toward Iran, a behind-the-scenes debate has broken out within the administration over whether the approach has any hope of reining in Iran’s nuclear program, according to senior administration officials.

The debate has pitted Ms. Rice and her deputies, who appear to be winning so far, against the few remaining hawks inside the administration, especially those in Vice President Dick Cheney’s office who, according to some people familiar with the discussions, are pressing for greater consideration of military strikes against Iranian nuclear facilities.

In the year since Ms. Rice announced the new strategy for the United States to join forces with Europe, Russia and China to press Iran to suspend its uranium enrichment activities, Iran has installed more than a thousand centrifuges to enrich uranium. The International Atomic Energy Agency predicts that 8,000 or so could be spinning by the end of the year, if Iran surmounts its technical problems.

Those hard numbers are at the core of the debate within the administration over whether Mr. Bush should warn Iran’s leaders that he will not allow them to get beyond some yet-undefined milestones, leaving the implication that a military strike on the country’s facilities is still an option.

Even beyond its nuclear program, Iran is emerging as an increasing source of trouble for the Bush administration by inflaming the insurgencies in Iraq, Afghanistan, Lebanon and in Gaza, where it has provided military and financial support to the militant Islamic group Hamas, which now controls the Gaza Strip.

Even so, friends and associates of Ms. Rice who have talked with her recently say she has increasingly moved toward the European position that the diplomatic path she has laid out is the only real option for Mr. Bush, even though it has so far failed to deter Iran from enriching uranium, and that a military strike would be disastrous.

The accounts were provided by officials at the State Department, White House and the Pentagon who are on both sides of the debate, as well as people who have spoken with members of Mr. Cheney’s staff and with Ms. Rice. The officials said they were willing to explain the thinking behind their positions, but would do so only on condition of anonymity.

Mr. Bush has publicly vowed that he would never “tolerate” a nuclear Iran, and the question at the core of the debate within the administration is when and whether it makes sense to shift course.

The issue was raised at a closed-door White House meeting recently when the departing deputy national security adviser, J. D. Crouch, told senior officials that President Bush needed an assessment of how the stalemate over Iran’s nuclear program was likely to play out over the next 18 months, said officials briefed on the meeting.

In response, R. Nicholas Burns, an under secretary of state who is the chief American strategist on Iran, told the group that negotiations with Tehran could still be going on when Mr. Bush leaves office in January 2009. The hawks in the room reported later that they were deeply unhappy — but not surprised — by Mr. Burns’s assessment, which they interpreted as a tacit acknowledgment that the Bush administration had no “red line” beyond which Iran would not be permitted to step.

But conservatives inside the administration have continued in private to press for a tougher line, making arguments that their allies outside government are voicing publicly. “Regime change or the use of force are the only available options to prevent Iran from getting a nuclear weapons capability, if they want it,” said John R. Bolton, the former United States ambassador to the United Nations.

Only a few weeks ago, one of Mr. Cheney’s top aides, David Wurmser, told conservative research groups and consulting firms in Washington that Mr. Cheney believed that Ms. Rice’s diplomatic strategy was failing, and that by next spring Mr. Bush might have to decide whether to take military action.

The vice president’s office has declined to talk about Mr. Wurmser’s statements, and says Mr. Cheney is fully on board with the president’s strategy. In a June 1 article for Commentary magazine, the neoconservative editor Norman Podhoretz laid out what a headline described as “The Case for Bombing Iran.”

“In short, the plain and brutal truth is that if Iran is to be prevented from developing a nuclear arsenal, there is no alternative to the actual use of military force — any more than there was an alternative to force if Hitler was to be stopped in 1938,” Mr. Podhoretz wrote.

Mr. Burns and officials from the Treasury Department have been trying to use the mounting conservative calls for a military strike to press Europe and Russia to expand economic sanctions against Iran. Just last week, Israel’s transportation minister and former defense minister, Shaul Mofaz, visited Washington and told Ms. Rice that sanctions must be strong enough to get the Iranians to stop enriching uranium by the end of 2007.

While Mr. Mofaz did not threaten a military strike, Israeli officials said he told Ms. Rice that by the end of the year, Israel “would have to reassess where we are.”

The State Department and Treasury officials are pushing for a stronger set of United Nations Security Council sanctions against members of Iran’s government, including an extensive travel ban and further moves to restrict the ability of Iran’s financial institutions to do business outside of Iran. Beyond that, American officials have been trying to get European and Asian banks to take additional steps, outside of the Security Council, against Iran.

“We’re saying to them, ‘Look, you need to help us make the diplomacy succeed, and you guys need to stop business as usual with Iran,’ ” an administration official said. “We’re not just sitting here ignoring reality.”

But the fallout from the Iraq war has severely limited the Bush administration’s ability to maneuver on the Iran nuclear issue and has left many in the administration, and certainly America’s allies and critics in Europe, firmly against military strikes on Iran. On Thursday, Mohamed ElBaradei, the head of the international nuclear watchdog agency, warned anew that military action against Iran would “be an act of madness.”

The debate over “red lines” is a familiar one inside the Bush White House that last arose in 2002 over North Korea. When the North Koreans threw out international inspectors on the last day of that year and soon declared that they planned to reprocess 8,000 rods of spent fuel into weapons-grade plutonium, President Bush had to decide whether to declare that if North Korea moved toward weapons, it could face a military strike on its facilities.

The Pentagon had drawn up an extensive plan for taking out those facilities, though with little enthusiasm, because it feared it could not control North Korea’s response, and the administration chose not to delivery any ultimatum. North Korea tested a nuclear weapon last October, and American intelligence officials estimate it now has the fuel for eight or more weapons.

Iran is far behind the North Koreans; it is believed to be three to eight years away from its first weapon, American intelligence officials have told Congress. Conservatives argue that if the administration fails to establish a line over which Iran must not step, the enrichment of uranium will go ahead, eventually giving the Iranians fuel that, with additional enrichment out of the sight of inspectors, it could use for weapons.

To date, however, the administration has been hesitant about saying that it will not permit Iran to produce more than a given amount of fuel, out of concern that Iran’s hard-liners would simply see that figure as a goal.

In the year since the United States made its last offer to Iran, the Iranians have gone from having a few dozen centrifuges in operation to building a facility that at last count, a month ago, had more than 1,300. “The pace of negotiations have lagged behind the pace of the Iranian nuclear program,” said Robert Joseph, the former under secretary of state for international security, who left his post partly over his opposition to the administration’s recent deal with North Korea.

The Pakistani army is paralysed by the growing Taliban threat and some retired officers are covertly aiding the militants, according to a former CIA officer.

Soldiers posted to Waziristan, a tribal area that hosts an estimated 2 000 al-Qaeda fighters, are "huddling in their bases, doing nothing", said Art Keller, a CIA case officer who was posted to Pakistan last year.

"Their approach was to pretend that nothing was wrong because any other approach would reveal that they were unwilling and unable to do anything about Talibanisation," said Keller, who has visited Waziristan.

The Pakistani military insists it is doing its best. President Pervez Musharraf has repeatedly referred to the 80 000 soldiers posted to the tribal areas, about 700 of whom have been killed in action.

But Keller said that behind the scenes, the fight is riven by divisions among the officers.

"There are the moderates who fear Talibanisation, the professional jihadis who want to embrace the Taliban again, and the middle group who aren't too fond of the Taliban but resent doing anything under pressure from the US out of sheer bloody-minded stubbornness," he said. "Because of [that], the Pakistani military remains paralysed."

Keller alleged that retired army officers, including the former spy chief Hamid Gul, are secretly supporting the Taliban. "To the degree that they aren't arrested or forced to cease and desist, they are tacitly tolerated," he said.

General Gul, who has faced similar accusations before, said on Friday night: "I morally support the movement to end the American occupation of Afghanistan. But there is no physical dimension to it, no hidden agenda."

Sensitive timeKeller's comments come at a sensitive time in United States-Pakistani relations. Since 2001, Washington has given Pakistan $10-billion in exchange for counter-terrorism cooperation. But although hundreds of al-Qaeda figures have been arrested, Osama bin Laden remains at liberty and Taliban attacks on Afghanistan have soared.

On Thursday, the US Assistant Secretary of State, Richard Boucher, visited Quetta, the capital of the western province of Baluchistan where Nato officials say the Taliban has headquarters. The chief minister of Baluchistan, Jam Muhammad Yousaf, told him that "Mullah Omar or Osama bin Laden are not [here]", according to a government statement.

Uzbek, Arab, Chechen and Somali militants are sheltering in Waziristan, to the north of Baluchistan. The majority Uzbeks are concentrated around Mir Ali in north Waziristan, where they have allied with local fighters -- self-styled "Pakistani Taliban" -- to coordinate attacks inside Afghanistan.

Musharraf's efforts to stem the violence through a controversial peace deal with the militants have failed, and in recent months "Talibanisation" has spread north out of the tribal belt and into North-West Frontier province, with attacks on music shops, barbers and government officials.

But Keller said American efforts to catch the ringleaders are being thwarted by Pakistani rules restricting CIA agents to heavily guarded military camps.

"Limited freedom of movement and limited freedom to directly engage locals were, and remain, the biggest obstacles to success," he said. Critics say the CIA has also inflamed the situation through secretive attacks by Predator aeroplanes on al-Qaeda targets that have killed dozens of civilians.

Last year, the CIA revived efforts to hunt Bin Laden and his deputy Ayman al-Zawahiri. Keller doubted they are in Waziristan. "I don't think the two top guys are there, but some roads leading to them run through there," he said.

Excessive pressure from Washington is also hampering the chase, he added. Spies need peace and quiet to "spin webs and wait for the flies to come", he said. "Such a manhunt is chess, not checkers." -

ISLAMABAD: Four days after President General Pervez Musharraf claimed the Pakistani forces are on the verge of wiping out militant camps in Balochistan, ten soldiers of the army were gunned down in Quetta, the capital of the trouble-stricken province, the responsibility for which has been claimed by none other than the Baloch rebels.

A rebel nationalist group called the Balochsitan Liberation Army, which takes the slain Baloch nationalist leader Nawaz Akbar Bugti as its hero and is striving for an autonomous Balochistan province, has claimed responsibility for killing ten soldiers of Pakistan army late on Thursday night in an ambush, near the Quetta Railway station. sFour days before the ambush, during a visit to the Sui gas fields in Balochistan on June 4, General Pervez Musharraf had reiterated an amnesty offer to the rebel nationalists, saying that the security forces would not take any action against the rebels if they surrendered their arms, but that failure to do so would invite the wrath of the security forces. Read latest news at DNA

According to Major General Arshad Waheed, the spokesman of the Inter Services Relations (ISPR), 14 soldiers of the Army who had reached Quetta by Chiltan Express at around 10:15 pm on Thursday, collectively hired a private Suzuki van to proceed to the cantonment area of the city.

As soon as they reached near Dak Bungalow on Zarghoon Road, some Baloch rebels apparently, belonging to the VBLA and riding a white Suzuki car, sprayed bullets on them, killing ten of them on the spot while inflicting injuries to four others.

DIG Operations Quetta Rehmat Ullah Niazi said that during the operation Labour Secretary of BNP Agha Hasan Baloch was also arrested.

He confirmed the arrest of Labour Secretary of BNP Agha Hasan Baloch adding that he has been arrested on suspicion.

He said that Leader of BNP Mengal Group was arrested from his residence.

On the other hand, Baloch Liberation Army has accepted the responsibility of terrorist incident in Quetta.http://paktribune.com/news/index.shtml?178200TANK: Unknown miscreants Monday attacked a FC vehicle with hand grenade resulting in the death of one official while three police officials including a pedestrian were seriously injured.

According to details, unknown miscreants with the help of hand grenade attacked a vehicle of Para Military Forces resulting in the death of FC official while three others sustained serious injuries. One pedestrian got injured in the attack.

Private TV reports that a wave of unrest and chaos was created in Tank after the gruesome incident while all the entry and exit points have been sealed.

On the other hand, curfew has been imposed for 24 hours following the incident

Though an emergency conference between NATO and Russia on the Treaty on Conventional Armed Forces in Europe ended June 15 in deadlock, new insights into where Russia next will push back against Europe appeared, and the prospects for a secret deal between Russia and Moldova improved.

Analysis

An emergency conference to discuss the Treaty on Conventional Armed Forces in Europe (CFE) ended June 15 in deadlock. Russia convened the conference after Russian President Vladimir Putin called on all NATO countries to ratify the treaty, which has formed the basis for collective security in post-Cold War Europe. Though the summit ended without any movement on the heated debates between NATO and Moscow, confirmation of secret deals between Moldova and Russia was evident, and Russia now has a chance of legally moving more forces into Europe -- at least on Europe's periphery.

The CFE conference was held in Vienna, Austria, June 12-15; representatives attended from most nations that emerged from the former Soviet Union and most major NATO states. It was rumored that many powerful politicians from Russia and NATO would also attend, but in the end, technocrats from each state ultimately met to continue hammering out the same disputes that have been in the headlines for months now.

For NATO, the outstanding issue is the continued presence of Russian troops in Georgia and Moldova. The United States and NATO have said they will ratify their end of the CFE only if Russia removes its troops from Georgia and from Moldova's Transdniestria region, and agrees that a NATO international peacekeeping force should replace them. Russia's representative to the talks, Anatoly Antonov, called the suggestion humiliating, and countered that U.S. bases in Romania and Bulgaria posed a direct military threat to Russian borders.

Though nothing new came from the main discussions, an interesting side deal was revealed in the process. Stratfor first mentioned a rumored deal between Russia and Moldova on May 30. It now looks as if the deal consisted of more than rumors, and that Russia might use Moldova as one of its points for pushing back into Europe.

Moldova, Europe's poorest state, lies sandwiched between Ukraine and Romania. Its secessionist region, Transdniestria, is mainly populated by ethnic Russians and Ukrainians. Moldova refuses to release it, however, because it is Moldova's industrial center. Since the end of the Soviet Union, Transdniestria declared independence and went to war against Moldova; it now exists in legal limbo, with 2,500 Russian peacekeepers present to keep the situation from getting out of hand again. The West has accused Russia of violating the CFE, as Russia's military presence lacks a peacekeeping mandate. Meanwhile, Moldova has subjected the region to an economic blockade, with Russia recently blocking Moldovan access to Russian markets in return. Russia's response has hit the mostly agrarian country hard.

While the West confronts Russia on its allegedly illegal presence in Moldova and Russia begins to pull out of the CFE, rumors surfaced saying Russia and Moldova have agreed that, if the Russian military can remain in Transdniestria for another 10 years, Russia would agree to allow Moldova to reintegrate the secessionist territory -- and both sides would end their respective economic bans. The economic benefits of such a deal are obvious for both sides. The deal also would eliminate half of NATO's argument that Russia is in violation of the CFE. But the real twist of the rumored deal is that would put Russian troops in a strategically significant spot of Europe, namely, next to Romania -- just as the United States is moving in -- and flanking the far side of Ukraine, which Russia wants back.

Events at the CFE conference have made the rumor appear like more than just talk . At the meeting, U.S. representatives urged Moldova and Transdniestria to accept an international peacekeeping force, but the proposals were dismissed -- most likely because both countries already had a deal in the works with Russia, which Moldova hopes will end with territorial reintegration. An announcement came June 14 from Moldova's largest exporter, Moldova-Vin, that all outstanding trade issues between Russia and Moldova had been resolved. And at the end of the conference, Transdniestrian President Igor Smirnov asked Russia on June 15 to double its Transdniestrian peacekeeping contingent.

The deal between Moldova and Russia will benefit Moldova in the long run since ultimately it will be able to boot out the Russian troops and keep its separatist territory. But Russia is thinking in the more immediate term as it seeks to counter NATO expansion and the U.S. move to install missile defense and military bases closer to its border. Now Russia is pushing back, gaining a legal military foothold in Europe in the process

Turkmen President Gurbanguly Berdimukhammedov visited Iran on June 15 to discuss energy links. Berdimukhammedov is breaking with the policies of the late Turkmen President Saparmurat Niyazov (the Turkmenbashi) and is prepared to end Turkmenistan's relative isolation. In building links with Russia, Iran and China, Berdimukhammedov will have to find a careful balance between the players and Turkmenistan's need to speed up the development of its promising energy sector. Furthermore, by diversifying its list of energy customers, Turkmenistan is leaving its main customer -- Russian state-controlled natural gas monopoly Gazprom -- in the lurch.

Analysis

Turkmen President Gurbanguly Berdimukhammedov visited Iran on June 15 to discuss increasing energy links, particularly natural gas pipelines. This move signals a shift for Turkmenistan, which was relatively isolated under Berdimukhammedov's predecessor, President Saparmurat Niyazov (the Turkmenbashi), from the fall of the Soviet Union until Niyazov's death in December 2006. Turkmenistan has remarkable energy reserves and borders two large powers, Russia and Iran. Berdimukhammedov has made clear through his negotiations with Russia and new talks with Iran that he is interested in opening Turkmenistan politically and economically.

When Berdimukhammedov first took the reins in Turkmenistan, it was unclear whether he would follow his predecessor's isolationist policies or where his loyalties lay. Six months later, Turkmenistan is not fully consolidated behind Berdimukhammedov but it appears it is at least ready to emerge from its shell.

Berdimukhammedov made some significant changes during his first six months in power. He sacked top security official Akmurad Rejepov -- a bold move, considering Rejepov helped Berdimukhammedov come to power, but a move that got a potential powerful enemy out of the picture while helping Berdimukhammedov distinguish himself from the Turkmenbashi. Berdimukhammedov also brought ex-premiers Yelli Gurbanmuradov and Dortkuli Aidogayev out of house arrest. Gurbanmuradov was named energy minister and has proven to be the only person able to manage Turkmenistan's burgeoning energy industry.

Berdimukhammedov is now reaching out to his neighbors, seeking energy links and political connections that the Turkmenbashi shunned. Before his current visit to Iran, Berdimukhammedov met with Russian President Vladimir Putin during the recent St. Petersburg Economic Forum and expressed his eagerness to work closely with Russia. He even showed interest in becoming a member of the Commonwealth of Independent States and Shanghai Cooperative Organization.

Economically, Berdimukhammedov is reaching out in a sector that all of Turkmenistan's neighbors have an interest in: energy. Turkmenistan holds 2 trillion cubic meters of proven natural gas, and estimates of its oil reserves range from 546 million to 1.7 billion barrels. In 2006, Turkmenistan produced about 54.6 billion cubic meters (bcm) of natural gas and exported 42 bcm to Gazprom. These oil and natural gas reserves remained underdeveloped under Niyazov, but Berdimukhammedov's intent to open the energy market leaves this vast potential up for grabs.

Turkmenistan recently made several energy deals with Russia, one of which will move Turkmen natural gas through Kazakhstan in a new pipeline along the Caspian coast that will boost Kazakh and Turkmen natural gas exports to Russia by about 20 bcm. Recent talks between Turkmen officials and Russian companies -- including Gazprom -- yielded a deal with LUKoil, which now has the green-light to develop three fields, although neither the company nor the Turkmen government have indicated which fields.

The pipeline deal takes the wind out of Western plans for a pipeline under the Caspian Sea that would have given Europe a direct connection to Turkmen natural gas. But with the line to move Turkmen natural gas to Russian distribution networks, the undersea project faces too many obstacles to be built any time soon. Western nations also are hampered by concerns about Turkmenistan's human rights record. Though Western states find it strategically and politically difficult to make a serious bid for Turkmen energy, Russia will still face competition from Turkmenistan's other energy-hungry neighbors.

Iran has a keen eye on greater energy connections with Turkmenistan, which lies on Iran's northern border. Building pipelines from Turkmen fields to Iranian markets is a relatively simple task. There already are two pipelines connecting the countries, and the current talks concern a Turkmen suggestion to increase natural gas deliveries to Iran from 8 bcm to 14 bcm per year. Currently, Turkmen imports supply Iran's northern region, which is cheaper for Iran than shipping natural gas from the closest domestic source (located in the south).

Also on the table is a proposed pipeline that would begin in Turkmenistan and run 870 miles through northern Iran to Turkey -- moving Central Asian natural gas to Europe without first passing through Russia or under the Caspian. The plan originally failed because U.S. sanctions blocked capital investment in Iran, and Western oil companies were leery of signing deals with the unpredictable Niyazov. With Niyazov out of the way, the project has some new hope although the sanctions remain.

In the opposite direction, China has welcomed a Kazakh proposal to build a pipeline to ship Turkmen and Kazakh natural gas to China with a capacity of 30 bcm per year.

These talks have made some in the Kremlin wary of Berdimukhammedov's moves. Gazprom depends on Turkmen natural gas to fulfill its export contracts with Europe. If Turkmenistan successfully opens export routes to Iran or China, it will cut supplies going north to Russia -- devastating Gazprom by depriving it of the natural gas needed to meet its contractual obligations to Europe.

Although the new deal with Iran will put a squeeze on exports to Russia unless production levels increase accordingly, Berdimukhammedov's natural inclination -- as well as the new pipeline commitment to Russia and deals with Russian oil companies -- will keep Turkmenistan close to Russia for now. In the long run, however, Berdimukhammedov has made it clear that he intends to make energy connections outside of Russia, jumping into competition with Gazprom's control of the Eurasian energy market.

Russia's overwhelming need for Turkmen natural gas is at odds with Turkmenistan's plan to reform and diversify its energy system. Russia will become the main obstacle to any deals Berdimukhammedov and his newly open Turkmenistan want to make with Iran and China.

As an insignificant freelance journalist and a maverick private citizen, as an anti-establishment individualist, with no claim to fame, no title to distinction, no high office as incumbent and no party politics or other organisations to back or boost me to notice by the pseudo-secular mafia of mass media, I derive my simple moral sanction to pen this article from the following inspiring words of George Bernard Shaw (1856-1950):

'I am and have always been, and shall now always be, a revolutionary writer, because our laws make law impossible; our liberties destroy all freedom: our property is organised robbery; our morality is an impudent hypocrisy; our wisdom administered by inexperienced or mal-experienced dupes, our power wielded by cowards and weaklings, and our honour false in all its points. I am an enemy of the existing order.'

This is the only way in which I can react to the wayward and lawless ways of our 'noble' judiciary in India. In these columns last month, in an article titled 'The Darkest Day in our Legal History,' I had expressed my shock and concern about the authoritarian manner bordering on medieval judicial (Injudicious!) despotism, totally divorced from the letter and spirit of all known canons of Equity and Natural Justice, in which the Supreme Court of India had summarily dismissed the writ petition of Dr Subramaniam Swamy on the fundamental issue of Sonia Gandhi's (the spiritual and moral heir of Mahatma Gandhi according to our Judiciary!!) false affidavit in 2004 before the Returning Officer of Rae Barelli Parliamentary constituency regarding her non-existent and bogus educational qualifications from the University of Cambridge in England.

A three-Judge Bench comprising Chief Justice K G Balakrishnan and Justices B P Singh and G P Mathur asked Dr Swamy: 'Should the Supreme Court go into all the affidavits to find out they are false or not. Further investigation is not possible into a STALE ISSUE and it should be dropped.' It was a disastrous and disgraceful moment of deliberate dethronement of the Rule of Law, the Rule of Equality before the Law and the Rule of Monarchical Majesty of Law, not at the level of a III Class Magistrate in a remote village in Arunachal Pradesh but at the highest judicial level of the Supreme Court of India in New Delhi. Indeed it was a 'Moment of Nadir' in the tortured and chequered history of the march of Indian law towards the dark valley of judicial death.

However, for the Supreme Court of India at that moment, Sonia Gandhi shone pure as a crystal of virtue and public morality, apart from setting a supreme example of snow white transcendental truth. Applying these standards of TRUTH set and defined by the Supreme Court of India, the Madras High Court, in a historic judgement delivered on 13 June, 2007 and which will get quoted and re-quoted for centuries to come, directed the Chief Election Commissioner and Tamilnadu Chief Electoral Officer to initiate within six weeks action against AIADMK supremo J Jayalalithaa for filing false declarations in her nominations for four constituencies during the 2001 Assembly elections. All that the Supreme Court of India and our High Courts have to do to dethrone eternal Euclid in the realm of Geometry, is to declare that according to the noblest traditions of our convoluted judicial arithmetic and geometry, 2004 preceded 2001 and not vice versa! Then it will become easier for our Parliament to incorporate this mathematical judicial axiom into our sinking Constitution by amending it. The fact that Jayalalithaa was thrown out by the people of Tamilnadu in the 2006 Assembly Elections is not a 'Stale Issue,' applying the supremely solemn declaration founded on sanctimonious humbug, emanating from the humming sighs of our Men In Robes at the highest levels of our judiciary in our degraded and debauched land today. A Division Bench of Justices Dharmarao Elipe and S Palanivelu gave the directive while passing orders on a public interest litigation (PIL) filed by DMK MP C Kuppusamy in 2002. In a Non-Stale Manner the High Court of Madras declared: 'Persons holding high offices/positions should be role models to the general public and if they venture to commit flagrant violation of rule and laws and that too knowingly, that should not be taken lightly as it would send wrong signals that laws are meant only for general public and not for bigwigs who can go scot free.' Applying this sterling and judicially cast-iron yard stick, DMK MP C Kuppuswamy is a small wig and Jayalalithaa is a big wig. Viewing the whole issue in a sedately and suavely 'stale manner,' perhaps applying the same yardstick pari passu at the level of the Supreme Court of India may be (!!!) neither 'legally feasible' nor 'morally desirable' or 'officially pardonable'! The moral of the Supreme Court story is that Sonia Gandhi is a small wig and the renegade Dr. Subramaniam Swamy is a big wig and he is also guilty of avoidable blasphemy.

As an irrepressible and indomitable fighter for several public causes, at all costs, in spite of all terror and however long and hard the road may be, Subramaniam Swamy has issued the following statement which graphically presents to the public the 'acts' and 'deeds', 'puerile pronouncements' and 'gaseous effusions' of injustice emanating from our judiciary on vital matters affecting the life of our nation: 'I am moving a Review Petition in the Supreme Court to seek Sonia Gandhi's prosecution for perjury, based on the perceptive observations made yesterday (13 June, 2007) by a Division Bench of the Madras High Court consisting of Justices Dharmarao Elipe and S Palanivelu. The Learned Judges held that the alleged perjury of Jayalalithaa need to be proceeded with because................'

Applauding the Madras High Court Bench, I want the Supreme Court to review their order of 17 May dismissing my SLP against Sonia Gandhi's false declaration in affidavit on her educational qualification filed in 2004. The First Bench had held that the matter was 'STALE' and that I should be 'large hearted' while pursuing such cases.

However by comparison with Jayalalithaa, Sonia Gandhi's commission of the offence of perjury is far more serious because Sonia had lied about her educational qualifications. Jayalalithaa had merely furnished wrong and false details relating to the number of nominations filed by her in the 2001 Assembly elections in Tamilnadu. It is also much less 'STALE' since Sonia Gandhi filed a false affidavit in 2004, while Jayalalithaa's false averment was in 2001.

Hence, there cannot be two standards of justice, one for Sonia Gandhi and another for Jayalalithaa. It violates Article 14 of the Constitution. Otherwise a wrong signal will, to borrow the Madras High Court Bench's words, be sent to the general public that Sonia Gandhi is above the law, and can go scot free. The only contrived 'difference' between Sonia Gandhi and Jayalalithaa is that the latter is from an Indian family background, and has no dynasty to boast.�

Dr Subramaniam Swamy's brilliant and unassailable expose of the goings on in the decadent judiciary in India, brings to my mind the delightful account by Lord Dunning of the barbaric origin of fiat justitta in Rome in the days of the Roman Empire:

''Let justice be done

As done in Rome''

'In my coat of arms, I took as my motto, Fiat justitia' Let justice be done believing it to have a respectable origin. I have since discovered that it was first used to excuse the most outrageous injustice. It comes from a story told in Seneca. Pisco sentenced a soldier to death for the murder of Gaius. He ordered a centurion (a Roman official) to execute the sentence. When the soldier was about to be executed, Gaius came forward himself alive and well. The centurion reported it to Piso. He sentenced all three to death. The soldier because he had already been sentenced. The centurion for disobeying orders. And Gaius for being the cause of the death of two innocent men. Pisco excused it by the plea- Fiat justitia, ruat coelum - Let justice be done, though the heavens should fall.'

Our national misfortune is that we have had very few men of the judicial and moral stature of Justice Oliver Wendell Holmes (1841-1935) in our judiciary in our country after our independence. In his famous dissent in the LOCHNER CASE, he said that a judge should be trained to summarily disregard his personal likes and dislikes. He said: 'The correct question to ask is not : 'Do I consider the restriction reasonable but would a reasonable man necessarily consider it unreasonable?' The test therefore is not the subjective view of the judge as to reasonableness but the objective test of the reasonable man which is applied in several branches of the law. We in our country have not realised that if a Judge's social, political and economic theories and views were casually permitted to intrude in his decision on constitutional questions, we will be creating an unmanageable and uncontrollable jungle of POLITICAL JUDICIARY, letting loose an avalanche of unanswerable questions relating to the method of appointment of Judges to the High Courts and the Supreme Court of India. Besides, our Courts are Courts of general jurisdiction and are not limited to the determination of constitutional questions alone. In view of this, if the politics of a Judge becomes material for his appointment to the High Courts and the Supreme Court of India as indeed it has become in all parts of India during the last three decades and more particularly in 'highly communal' Tamilnadu, fair and impartial decision of cases would become impossible by virtue of the fact that the personal views of the judge may often obtrude in his judicial pronouncements. Criminalisation of politics may be disastrous for our nation; but even more disastrous is the politicisation of our judiciary which has kept an even pace, shoulder to shoulder, arm upon arm, along with criminalisation of politics.

Sonia's truth vs Swamy's blasphemy-II

V SUNDARAM

All the enlightened and patriotic people in India committed to the sacred cause of survival of consideration of the ideals of equity and natural justice in our Courts of Law, have been shattered by the manner in which a Bench of the Supreme Court of India, headed by its Chief Justice, cast aside a writ petition presented by Dr Subramanian Swami against the false affidavit filed by Sonia Gandhi in Rae Barelli Parliamentary Constituency relating to her fraudulent educational qualifications in the University of Cambridge. Dr Swami, the former Union Law and Commerce Minister and an elected member of the Lok Sabha from Bombay and Madurai, and later an elected member of the Rajya Sabha was indeed 'treated' as a stateless citizen, if not a refugee from Bangladesh, when the Supreme Court callously used the adjective 'STALE' while dismissing his petition. All that Dr Swami was seeking was SUBSTANTIVE JUSTICE in letter and spirit under the SUBSTANTIVE LAW of the Indian Constitution and the Representation of People Act. Likewise he was seeking ADJECTIVE JUSTICE in letter and spirit under the ADJECTIVAL LAW of the India Constitution. Statutory law or written law governs rights and obligations of those who are subject to it. Substantive law defines the legal relationship of people with other people or between them and the state. Substantive law stands in contrast to adjective law (Procedural law), which comprises the rules by which a court hears and determines what happens in civil or criminal proceedings. Procedural law deals with the method and means by which substantive law is made and administered. It means the rules according to which the SUBSTANTIVE LAW is administered, e.g., Rules of CIVIL PROCEDURE. In short it is that part of the Law that provides a method for enforcing or maintaining rights, or obtaining redress for their invasion. Adjectival law (Procedural Law) pertains to and prescribes the practice, method, procedure, or legal machinery by which Substantive Law is enforced or made effective. Both the Rule of Substantive Law and the Rule of Adjective Law in India received a lethal death blow when the Supreme Court dismissed Dr Swami's petition as STALE. By doing so in so brash a manner, the Supreme Court of India indeed behaved like Mughal Emperor Akbar. I am only reminded about the words of the eminent Historian Vincent Smith who viewed Akbar's DIN ILAHI �as an outcome of ridiculous vanity, a monstrous growth of unrestrained autocracy�. In the India of today thanks to the perverted functioning of our political democracy, we have an unchallenged reign and rule of ignorance at all levels. There is a total parity of self- chosen enthusiastic ignorance at all levels of the Executive, the Legislature and the Judiciary. Top men in the Executive, Legislature and the Judiciary compete with one another with pseudo-secular gusto in their unquenchable quest or thirst for Himalayan ignorance. I am not therefore surprised that our Courts of Law are just not concerned about the sacred 'Knowledge and Wisdom Traditions' in their own field of endeavour. When the Supreme Court used the adjective STALE in Dr. Subramanian Swami's case, it clearly violated the underlying spirit (if not letter!!) of the following words of wisdom of Justice William O Douglas (1898-1980) of the US Supreme Court, who as a very great Judge with a term lasting 36 years and 7 months, remained the longest-serving justice in the history of the American Supreme Court as of 2007. To quote his words from his Judgment in �Craig Vs Harney, 331 U.S. 367, 374 (1947)�:

�There is no special perquisite of the Judiciary which enables it, as distinguished from other institutions of democratic Government, to suppress, edit or censor events which transpire in proceedings before it�. The Supreme Court of India did precisely that in Dr. Subramanian Swami's Case. LORD BRIDGE

As a freelance Journalist, I prefer the folly of enthusiasm to the indifference of judicial wisdom. IQ means intelligence quotient. IQ at many levels of our Judiciary in India today, including the highest level of the Supreme Court of India, has come to mean not Intelligence Quotient but Ignorance Quotient, Influence Quotient, Inertia Quotient, Illegality Quotient, Immorality Quotient, Impotence Quotient and Insolence Quotient. IQ can never mean Inspiration Quotient or Illumination Quotient or Integrity Quotient. What should be viewed as scandalous, sacrilegious and nauseating in any civilized society, has become noble, sacred and sacrosanct in today's India. Am I not proclaiming that irony is the gaiety of reflection and the joy of freedom, even if not wisdom?

In a similar sarcastic diction, Anatole France (1844-1924) wrote with great feeling and passion:

�To disarm the strong and arm the weak would be to change the social order which it's my job to preserve.

Justice is the means by which established injustices are sanctioned

The majestic egalitarianism of the law, which forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal bread.�

Seeing the helpless deathly fate of the writ petition of Dr Subramanian Swami, founded on absolutely legal and reasonable grounds,

I am reminded of what Oscar Wilde said in beautiful verse when he was in Jail:

�Something was dead in each of us,

And what was dead was HOPE�

The unfortunate fate of Dr Subramanian Swami's Writ Petition, should make all of us aware of the fact that we are heading for another dark emergency of the kind that Indira Gandhi�Mother-in-Law of Sonia Gandhi�clamped down upon our nation in 1975. We are indeed heading for an Age of Serfdom, with Supreme Court's finally supreme declaration of Super Sonia Gandhi as the Mighty Mahatma Gandhi of today's India. Here again we the helpless masses of India, whatever might be the callous and cavalier contempt of the Supreme Court of India towards us all, I mean �WE THE PEOPLE�, we should all derive our strength from the following inspiring words� words aflame with fire and aglow with light�of Justice William O Douglas: �As night-fall does not come at once, neither does oppression...It is in such twilight that we all must be aware of change in the air�however slight�lest we become victims of the darkness�. I wish to declare on behalf of all the freedom loving citizens of India that the struggle today is between the helpless individual and his sacred power to express himself and the unabashed power structure of an irresponsible, discriminatory and dictatorial State and Government which seeks conformity, suppression and obedience, not through trial and error but through error and terror. This great and ancient nation, thanks to our wicked Government, is identified today more and more with material things and less and less with spiritual standards derived from our tradition of Sanathana Dharma. We have become an arrogant, selfish and greedy nation interested only in US Dollars, British Sterling and Euro Dollars. We are not interested in people and their hopes, urges and aspirations. We need a faith that dedicates us to something bigger and more important than ourselves or our possessions. Today's establishment in the UPA Government is like that of Genghis Khan (1162-1227) or that of George III (1738-1820). If the State and the Government continue to adhere to the tactics of Genghis Khan or George III, the only redress for the masses of India, honoured in tradition, will be an open and armed revolution. To accomplish great things, we must not only act but also dream, not only plan but also believe. Here again I cannot help quoting Anatole France: �For every monarchy overthrown the sky becomes less brilliant, because it loses a star. A republic is ugliness set free.'

Now it can be asked: �Do academic writers and Journalists have any role to play in all these matters and affairs?� I would like to give an answer to this question from an article by Prof. Glanville Williams in the CAMBRIDGE LAW JOURNAL entitled �The Lords and Impossible Attempts, or Quis Custodiet Ipsos Custodes?�. His sharp argument in this article led to the overruling by the House of Lords of 'Anderton Vs Ryan'.

The effect of Prof. Glanville Williams's article was best expressed in the following words of Lord Bridge: �I cannot conclude this opinion without disclosing that I have had the advantage, since the conclusion of the arguments in this appeal, of reading an article by Prof. Glanville Williams entitled �The Lords and Impossible Attempts, or Quis Custodiet Ipsos Custodes?� (1986) in Cambridge Law Journal. The language in which he criticizes the decision in Anderton Vs Ryan is not conspicuous by its moderation but it would be foolish on that account, not to recognise the force of the criticism and churlish not to acknowledge the assistance I have derived from it.�

The common man in the street in India will feel free and relaxed only on that day when India becomes capable of producing humble, knowledgeable, wise, courageous, straight-forward, impartial, unfettered, undaunted and public spirited Judges, devoted to the letter and spirit of the Law of our Constitution, in our High Courts and our Supreme Court like Lord Bridge of England.

(The writer is a retired IAS officer) e-mail the writer at vsundaram@newstodaynet.com

Maj. Gen. John DeFreitas, commander of U.S. Army Intelligence and Security Command; Col. Dan Meyer, U.S. Army South chief of staff; Col. Richard Saddler, former commander of 470th Military Intelligence Brigade; Col. Wendy Martinson, commander of U.S. Army Garrison Fort Sam Houston; and Staff Sgt. Martin Martinez of the 470th Military Intelligence Brigade, break ground June 5 at Camp Bullis, Texas, for the Defense Department's first joint detention training facility. Photo by Sgt. Jason Merrell

FORT SAM HOUSTON, Texas (American Forces Press Service, June 18, 2007) - The intelligence community reached a milestone earlier this month as leaders broke ground for the first joint detention training facility in the Defense Department.

The U.S. Army Intelligence and Security Command Detention Training Facility, slated for a fall completion, will be located in a remote area of Camp Bullis known as Black Jack Village. The 470th Military Intelligence Brigade, at nearby Fort Sam Houston, will oversee daily operations.

The facility will be "the first in DoD that will enable all of the services to come together and train the full operations that center around detention operations," said INSCOM Commander Maj. Gen. John DeFreitas III in his opening remarks at the June 5 groundbreaking ceremony.

The state-of-the-art center will equip servicemembers with the skills they need to stand up and run a detention facility, skills that have come to the forefront with the nation's most current war, Maj. Gen. DeFreitas said. "Detention facilities are complex, with a host of legal and medical issues," the general said.

However, servicemembers are lacking in experience with detention facilities, particularly in an age of 100-hour wars, the general said. The inexperience, coupled with a continuing need for detention facilities, has created a need for a higher level of training.

To fill the training gap, Detention Training Facility instructors will impart lessons learned downrange, taking all facets of facility operations into consideration to include the roles and responsibilities of military police, interrogators, guards, medical personnel and lawyers, as well as training that will help course attendees understand the interoperability of their jobs.

"There's no place today in the DoD with the ability to train those skill sets within one location," Maj. Gen. DeFreitas said.

Training will comprise course work and scenarios that will familiarize students with a variety of possible events, the general said. He described a possible scenario in which a local tribal leader asks for the release of prisoners and then holds a demonstration when his demands aren't met. Students learn possible solutions and the consequences of their actions. "These are real-world situations," Maj. Gen. DeFreitas said. "We're taking lessons learned from the field and will directly apply them here."

By dealing with various scenarios prior to real-world events, servicemembers will be better equipped to make the right decisions. For instance, health care providers will learn how to look for signs of torture and to determine whether the detainee has been mistreated, and guards will become acquainted with the telltale signs of a planned escape. On a personal side, students will learn to deal with the emotions associated with caring for or guarding someone who may just have shot another servicemember.

"If trainees are never confronted with a situation, they may be unsure of what to do when it happens. Do you report?" Maj. Gen. DeFreitas said. "You have to think through the emotions; that's the whole purpose of training. We will teach people what to look for and also explain to them that their leaders expect them to report if something isn't right."

If this type of training had been in place a few years ago, the prisoner-abuse scandal at Abu Ghraib in Iraq, "probably the most embarrassing event that our nation has suffered in the past several years," could have been prevented, Maj. Gen. DeFreitas said.

"The Army hadn't done a good job training interrogators, the folks that were involved with detainee operations and the leaders. We learned in painful detail how important this training is," the general said.

Once up and running, the facility will be available to servicemembers throughout the world.

"This is a big day for the future of interrogator training," said Army Col. Richard Saddler, former commander, 470th Military Intelligence Brigade. "With the first shovel of dirt, the foundation of interrogator future collective training is on its way."

New intelligence reveals China is covertly supplying large quantities of small arms and weapons to insurgents in Iraq and the Taliban militia in Afghanistan, through Iran. U.S. government appeals to China to check some of the arms shipments in advance were met with stonewalling by Beijing, which insisted it knew nothing about the shipments and asked for additional intelligence on the transfers. The ploy has been used in the past by China to hide its arms-proliferation activities from the United States, according to U.S. officials with access to the intelligence reports. Some arms were sent by aircraft directly from Chinese factories to Afghanistan and included large-caliber sniper rifles, millions of rounds of ammunition, rocket-propelled grenades and components for roadside bombs, as well as other small arms. The Washington Times reported June 5 that Chinese-made HN-5 anti-aircraft missiles were being used by the Taliban. According to the officials, the Iranians, in buying the arms, asked Chinese state-run suppliers to expedite the transfers and to remove serial numbers to prevent tracing their origin. China, for its part, offered to transport the weapons in order to prevent the weapons from being interdicted. The weapons were described as "late-model" arms that have not been seen in the field before and were not left over from Saddam Hussein's rule in Iraq. U.S. Army specialists suspect the weapons were transferred within the past three months. The Bush administration has been trying to hide or downplay the intelligence reports to protect its pro-business policies toward China, and to continue to claim that China is helping the United States in the war on terrorism. U.S. officials have openly criticized Iran for the arms transfers but so far there has been no mention that China is a main supplier. Defense Secretary Robert M. Gates said Wednesday that the flow of Iranian arms to Afghanistan is "fairly substantial" and that it is likely taking place with the help of the Iranian government. Defense officials are upset that Chinese weapons are being used to kill Americans. "Americans are being killed by Chinese-supplied weapons, with the full knowledge and understanding of Beijing where these weapons are going," one official said. The arms shipments show that the idea that China is helping the United States in the war on terrorism is "utter nonsense," the official said. John Tkacik, a former State Department official now with the Heritage Foundation, said the Chinese arms influx "continues 10 years of willful blindness in both Republican and Democrat administrations to China's contribution to severe instability in the Middle East and South Asia." Mr. Tkacik said the administration should be candid with the American people about China's arms shipments, including Beijing's provision of man-portable air-defense missiles through Iran and Syria to warring factions in Lebanon and Gaza. Apologists for China within the government said the intelligence reports were not concrete proof of Chinese and Iranian government complicity. Pentagon spokesmen declined to comment. A spokesman for the Chinese Embassy did not return telephone calls seeking comment.

Iran boat threat Iran is adding Chinese-made small boats armed with anti-ship cruise missiles to the Islamic Revolutionary Guards Corps navy that can be used in attacks on shipping in the oil-rich Persian Gulf, according to the Office of Naval Intelligence (ONI). "Iran still states that the [Islamic Revolutionary Guards Corps navy] will employ swarming tactics in a conflict," ONI analyst Robert Althage said in an e-mail, noting that the paramilitary organization "continues to add boats armed with anti-ship cruise missiles, such as the FL-10, to its inventory." China began supplying Iran over the past several years with small, high-speed C-14 catamarans armed with the optically guided FL-10 anti-ship cruise missiles. Mr. Althage said in response to questions posed by Bloomberg News that recent exercises by the Iranians did not show any new capabilities and that the maneuvers appeared designed "for publicity." Currently, Iran operates three Russian-made Kilo submarines but has not yet mined waterways, the ONI analyst stated. A 2004 ONI report said the Iranian IRGC navy has more than 1,000 small boats ranging in length from 17 to 60 feet, and many are concentrated near the strategic Strait of Hormuz, where a large majority of the world's oil passes. The boats can be used in attacks against shipping and include infantry weapons, unguided barrage rockets, recoilless guns, shoulder-fired surface-to-air missiles and rocket-propelled grenades.

North Korea watch U.S. intelligence agencies think North Korea is continuing development of nuclear weapons, as well as working on "miniaturization" of weapons for missile warheads, according to a senior Bush administration official. Since the February nuclear accord reached in Beijing, North Korea has continued work on weapons, said a senior Bush administration official involved in North Korean affairs. "There are no indications that they are not pursuing a nuclear weapons capability, to include the weaponization and miniaturization," the official said. U.S. intelligence officials think North Korea, which received equipment through the covert Pakistani nuclear-supplier network headed by Abdul Qadeer Khan, obtained Chinese documents on designing a small warhead, the key to developing a nuclear weapon small enough for missile warheads. The Chinese-language warhead design documents were first uncovered in Libya, which gave up its nuclear program in 2003. Three recent missile tests in North Korea over the past several weeks were anti-ship cruise missiles fired during exercises that were not unusual for North Korean military forces at this time of year, the official said. "Those who are looking at the six-party process and where we are today with [the Banco Delta Asia funds transfer] are very disappointed," the senior official said. "This doesn't build confidence. This is a time that is very tense and we want to go to implementing the 13 February agreement. So even though this is a normal exercises, I think there is an element of disappointment that North Korea would move in that direction." North Korea has shown no signs of preparing of another underground nuclear test but "they could have a nuclear test at any time with minimal or no warning," the official said. The October test was a "nuclear event" but the blast caused by the test was smaller than North Korea had hoped, the official said. c Bill Gertz covers the Pentagon. He can be reached at 202/636-3274 or at bgertz @washingtontimes.com.

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